PRECIOUS-Gold hits near three-week high as bill to end US shutdown passes Senate

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US Senate passes bill to end shutdown

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Gold hits highest since October 23

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'FOMO' buying persists amid favourable outlook, analyst says

(Updates for EMEA morning hours)

By Anmol Choubey

Nov 11 (Reuters) - Gold prices extended gains on Tuesday to their highest in nearly three weeks, supported by expectations a potential U.S. government reopening could restart the flow of U.S. economic data ahead of an expected Federal Reserve rate cut next month.

Spot gold was up 0.5% at $4,137.06 per ounce as of 0816 GMT, having earlier hit its highest since October 23 at $4,148.75, still below its record peak of $4,381.21 hit on October 20.

U.S. gold futures for December delivery rose 0.5% to $4,143.80 per ounce.

Gold is gaining traction because of "a renewed focus on U.S. fiscal concerns, as a government reopening would enable fresh spending financed through additional borrowing", said Ole Hansen, head of commodity strategy at Saxo Bank.

The U.S. Senate on Monday passed a compromise measure that would end the longest government shutdown in U.S. history, which had delayed critical economic data releases, including the key non-farm payrolls report.

It next heads to the Republican-controlled House of Representatives, where Speaker Mike Johnson has said he would like to pass it as soon as Wednesday.

"A reopening would also restart the economic data flow, potentially firming expectations for a December rate cut," Hansen said.

U.S. Federal Reserve policymakers remain divided on the path of monetary policy, complicating Chair Jerome Powell's efforts to navigate differing views following two rate cuts earlier this year.

Fed Governor Stephen Miran on Monday suggested that a 50 basis-point cut might be appropriate for December.

Meanwhile data last week highlighted economic stress, with the U.S. shedding jobs in October and consumer sentiment declining to a 3-1/2-year low as of early November.

Traders are pricing in a 64% probability of a quarter-point rate cut next month.

Julius Baer analyst Carsten Menke reiterated a constructive outlook for both gold and silver, adding that "the fear of missing out still seems present" amid a favorable fundamental backdrop for the metals.

Non-yielding gold typically performs well in low interest-rate environments and during periods of economic uncertainty.

Elsewhere, spot silver gained 0.5% to $50.81 per ounce, platinum rose 1% to $1,593.11 and palladium climbed 1.3% to $1,433.36. (Reporting by Anmol Choubey in Bengaluru; Editing by Jan Harvey)